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April 11, 2011 – 5:38 pm

The market has moved sideways for over a week and today’s small gain at the opening is no different than all of last week’s lack of movement. Everyone is waiting for Alcoa to report this evening thus opening the flood gates for earnings reports. The numbers will have to be better than expected to push stocks higher.

The news over the weekend about a compromise on the U.S. budget was a boost but that was last Friday night and the market had to wait 2 days to respond and at the same time Japan had another 7 plus aftershock. There is still a lot of unstable activity worrying the market.

For stock prices it is about what the consumer is going to do? He is fighting inflated prices, a lack of a strong job market and worries about government debt not only in the U.S. but worldwide to say nothing about a housing market that is still very weak. Retail sales in the first quarter was rather robust and there is no reason to expect
the consumer to stop spending. However, he has changed his spending dramatically since 2007, saving more and paying down credit cards. For the long term that is very good, but it also causes some uncertainty. For the consumer the most distressing issue of the day is high gasoline prices. A fall in prices would go a long way to ease the fears for the stock market as it looks to consumers to keep Corporate America healthy.

Good Trading
Steve Peasley

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